Revenue Growth - Total revenue increased 31% to $73.1 million for the three months ended October 31, 2022, compared to $55.9 million for the same period in 2021[130] - Total revenue increased 32% to $204.3 million for the nine months ended October 31, 2022, compared to $155.2 million for the same period in 2021[130] - Total revenue for the three months ended October 31, 2022, increased by $17.2 million, or 31%, to $73.1 million compared to $55.9 million for the same period in 2021[152] - Subscription and related services revenue rose by $8.6 million, or 35%, to $33.0 million for the three months ended October 31, 2022, driven by new healthcare services clients and expansion to existing clients[154] - Total revenue for the nine months ended October 31, 2022, increased by $49.1 million, or 32%, to $204.3 million compared to $155.2 million for the same period in 2021[153] Financial Losses - Net loss was $40.2 million for the three months ended October 31, 2022, compared to $36.3 million for the same period in 2021[130] - Adjusted EBITDA was negative $18.3 million for the three months ended October 31, 2022, compared to negative $17.6 million for the same period in 2021[130] - Adjusted EBITDA for the three months ended October 31, 2022, was a loss of $18.3 million, compared to a loss of $17.6 million for the same period in 2021[187] - Free cash flow was negative $27.5 million for the three months ended October 31, 2022, compared to negative $39.0 million for the same period in 2021[130] - Free cash flow for the three months ended October 31, 2022, was a negative $27.5 million, an improvement from negative $39.0 million in the same period of 2021[189] Cash and Cash Equivalents - Cash and cash equivalents as of October 31, 2022, were $209.6 million, a decrease of $104.2 million compared to January 31, 2022[130] - As of October 31, 2022, the company had cash and cash equivalents of $209.6 million, down from $313.8 million as of January 31, 2022[191] - The company believes that existing cash and cash equivalents, along with available financial resources, will be sufficient to meet its needs for at least the next 12 months[192] - The net decrease in cash and cash equivalents for the nine months ended October 31, 2022, was $104.2 million, contrasting with an increase of $181.6 million in the same period of 2021[197] Operating Activities - Net cash used in operating activities was $20.7 million for the three months ended October 31, 2022, compared to $24.5 million for the same period in 2021[130] - Cash used in operating activities for the nine months ended October 31, 2022, was $74.2 million, an increase from $36.7 million in the same period of 2021, reflecting higher employee compensation costs and outside services costs[199] - The increase in cash used in operating activities was driven by higher employee headcount and compensation costs, partially offset by increased cash received from customers due to higher revenues[200] Expenses - Cost of revenue (excluding depreciation and amortization) increased by $2.9 million, or 25%, to $14.6 million for the three months ended October 31, 2022, primarily due to higher employee compensation and benefits costs[156] - Research and development expense increased by $7.4 million, or 48%, to $22.7 million for the three months ended October 31, 2022, driven by higher compensation and increased headcount[166] - Sales and marketing expense rose by $4.6 million, or 14%, to $36.6 million for the three months ended October 31, 2022, primarily due to increased compensation and third-party costs[162] - General and administrative expense increased by $1.6 million, or 9%, to $19.6 million for the three months ended October 31, 2022, mainly due to higher compensation costs[170] - Payment processing expense increased by $8.7 million, or 30%, to $37.5 million for the nine months ended October 31, 2022, driven by an increase in patient payments processed[161] Depreciation and Amortization - Depreciation expense increased by $1.1 million to $4.9 million for the three months ended October 31, 2022, representing a 31% increase compared to $3.7 million for the same period in 2021[174] - For the nine months ended October 31, 2022, depreciation expense rose by $2.6 million to $13.4 million, a 25% increase from $10.7 million in the prior year[175] - Amortization expense increased by $0.3 million to $1.8 million for the three months ended October 31, 2022, reflecting a 20% increase from $1.5 million in the same period of 2021[176] Financing Activities - Net cash used in financing activities for the nine months ended October 31, 2022, was $10.4 million, compared to a net cash inflow of $242.9 million in the same period of 2021, which included $245.8 million from a common stock offering[203][204] - The Third SVB Facility allows for borrowings up to $100.0 million, with an interest rate of 5.75% as of October 31, 2022, and no outstanding balance[194] - The company was in compliance with all covenants related to the Third SVB Facility as of October 31, 2022[196] Market Risks and Accounting Policies - The company continues to be exposed to market risks, including interest rate and foreign exchange risks, with no significant changes reported during the nine months ended October 31, 2022[210] - There were no significant changes in critical accounting policies and estimates during the nine months ended October 31, 2022[208] - The primary sources of cash from operating activities include cash received from customers and interest earned on money market mutual funds[198]

Financial Data and Key Metrics Changes - Revenue for Q2 2023 was $68 million, representing a 33% year-over-year increase, marking the sixth consecutive quarter of over 30% revenue growth [12][11] - Health care services revenue, which includes subscription and related services and payment processing revenue, increased by 29% year-over-year [13] - Adjusted EBITDA outlook for fiscal 2023 was raised to a range of negative $109 million to negative $106 million, improved from the previous range of negative $126 million to negative $122 million [17] Business Line Data and Key Metrics Changes - The average number of health care services clients reached 2,776, with an addition of 250 clients sequentially, achieving a 40% year-over-year growth [12] - Payment processing revenue grew by 20% year-over-year, following a 38% growth in the same quarter last year [14] - Life Sciences revenue saw a significant increase of 46% year-over-year, building on a 95% growth from the previous year [15] Market Data and Key Metrics Changes - Phreesia now impacts over 10% of patient visits in the U.S. daily, indicating a strong market presence [15] - The company expects to end fiscal 2023 with cash and cash equivalents between $165 million and $170 million, supporting its growth plans [18] Company Strategy and Development Direction - The company is focused on maintaining a best-in-class product offering, expanding relationships with existing clients, and growing its network with new clients [18] - Investments in product development and client success are seen as critical to driving future growth and shareholder value [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted EBITDA profitability by fiscal 2025, supported by strong performance and effective cost management [17][33] - There is a pragmatic approach to utilization expectations, with no anticipated significant increases in the second half of the year [54] Other Important Information - The company has not observed any significant trends in rising patient self-pay balances affecting its payment processing outlook [56] - Management emphasized the importance of building trust with clients and providing value to drive expansion within existing accounts [81] Q&A Session Summary Question: Insights on EBITDA guidance raise - Management highlighted a focus on smart spending and careful evaluation of expenses as key factors in the improved EBITDA outlook [21][22] Question: Life Sciences business performance - Management noted that investments in network growth and product development have significantly contributed to the strong performance in Life Sciences [23] Question: Visibility on digital advertising and Life Sciences growth - Management indicated decent visibility for the fiscal year but noted January as a month with less visibility due to client fiscal year-end contracts [27][29] Question: Cash flow guidance and balance sheet confidence - Management confirmed confidence in cash balances and the ability to execute on the fiscal 2025 plan without any borrowings [33][34] Question: Average revenue per client trends - Management clarified that the decline in average revenue per client is primarily due to the growth in the payments business, while subscription revenue per client has remained stable [49][50] Question: Utilization expectations - Management does not expect a significant increase in utilization in the second half of the year, based on current data and provider feedback [54][76] Question: Competition and market dynamics - Management acknowledged ongoing competition but emphasized the complexity of their offerings and the value they provide to clients [61][62] Question: Payment processing ramp-up for new clients - Management explained that there is typically a ramp-up period of three to four months for new clients to fully transition to their payment solutions [69] Question: Client retention and health care services - Management reported consistent client retention rates, with no significant changes observed in the macro environment affecting retention [117][118]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38977 PHREESIA, INC. (Exact name of registrant as specified in its charter) Delaware 20-2275479 (State or othe ...

Financial Data and Key Metrics Changes - The average healthcare services clients increased by 33% year-over-year [10] - Revenue outlook for the year is maintained at $271 million to $275 million, implying a growth of 27% to 29% year-over-year [11] - Adjusted EBITDA outlook improved to a range of negative $126 million to negative $122 million, up from a prior outlook of negative $154 million to negative $149 million [13] Business Line Data and Key Metrics Changes - Life sciences growth was up 51% year-over-year, although revenue decreased slightly by $563,000 sequentially from Q4 [12] Market Data and Key Metrics Changes - Patient utilization trends were slightly below expectations, which may persist throughout the year [11] Company Strategy and Development Direction - The company focuses on building great products and expanding its client base, emphasizing a "land and expand" strategy [21][24] - Management is committed to addressing social determinants of health, aiming to empower providers rather than monetizing these services [33] Management's Comments on Operating Environment and Future Outlook - Management noted a mixture of COVID-related issues affecting both staff and patient attendance, impacting overall patient utilization trends [30] - The company is confident in its ability to achieve profitability by fiscal 2025, with expected revenue growth at a CAGR of 28% and expenses growing at 10% to 11% [77] Other Important Information - The company has maintained a consistent subscription revenue per provider client at $11,500 for several quarters [21] - The current cash balance and line of credit are deemed sufficient to finance the company's plans to achieve its 2025 targets [77] Q&A Session Summary Question: Dynamics around revenue per provider client and decline - Management explained that the decline is due to a "land and expand" strategy where new clients initially generate lower revenue [21] Question: Update on patient utilization trends - Management indicated that trends are influenced by a combination of COVID impacts and staffing issues [30] Question: Update on social determinants of health offering - Management emphasized the importance of addressing social determinants without monetizing them, focusing on empowering providers [33] Question: Insights on subscription revenue per client - Management noted low churn rates and success in upselling and cross-selling, indicating a strong customer retention strategy [64] Question: Pipeline for enterprise clients - Management stated that the go-to-market strategy remains consistent, focusing on delivering value and continuous engagement with clients [104] Question: Changes in marketing and campaign scrutiny - Management acknowledged increased scrutiny on marketing effectiveness and a shift away from traditional advertising methods [94]

Investor Presentation June 2022 DISCLAIMER This presentation includes express or implied statements that are not historical facts and are considered forward- looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial informa ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38977 PHREESIA, INC. (Exact name of registrant as specified in its charter) Delaware 20-2275479 (State or oth ...

Phreesia, Inc. (NYSE:PHR) Q4 2022 Earnings Conference Call March 30, 2022 5:00 PM ET Company Participants Balaji Gandhi - SVP, IR Chaim Indig - CEO and Co-Founder Randy Rasmussen - CFO Conference Call Participants Anne Samuel - JPMorgan Thomas Kelliher - RBC Capital Markets Jessica Tassan - Piper Sandler Richard Close - Canaccord Genuity Daniel Grosslight - Citigroup John Ransom - Raymond James Joy Zhang - SVB Leerink Glen Santangelo - Jefferies Ryan MacDonald - Needham & Company Joe Vruwink - Robert ...

Part I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Phreesia offers a SaaS platform for healthcare organizations, enhancing patient access, payments, and clinical support, with growth driven by client expansion, innovation, and strategic acquisitions [Overview](index=7&type=section&id=Item%201.%20Business%23Overview) Phreesia's SaaS platform optimizes healthcare operations and patient engagement, serving over 2,000 clients and processing nearly $2.8 billion in payments in fiscal 2022 - Phreesia's SaaS platform offers integrated solutions for patient access, registration, payments, and clinical support to healthcare organizations[28](index=28&type=chunk) - In fiscal 2022, the platform facilitated visits for over **2,000 healthcare clients** and processed nearly **$2.8 billion** in patient payments, with **79%** of that volume being credit/debit card payments processed as a payment facilitator[28](index=28&type=chunk) - The company has been recognized by KLAS as a market leader for its integration capabilities, broad adoption, and client satisfaction, particularly in its response to the COVID-19 pandemic[29](index=29&type=chunk) [Our Platform and Market Opportunity](index=7&type=section&id=Item%201.%20Business%23Our%20Platform%20and%20Market%20Opportunity) Phreesia's platform provides comprehensive solutions across patient access, revenue cycle, and life sciences, targeting an estimated $9.0 billion addressable market - The Phreesia Platform is a comprehensive suite of solutions covering patient access, registration, revenue cycle, clinical support, and life sciences marketing[32](index=32&type=chunk)[38](index=38&type=chunk) - The company estimates its total addressable market to be approximately **$9.0 billion**[36](index=36&type=chunk) - The market opportunity is derived from potential subscription revenue from **~1.3 million** U.S. healthcare organizations, payment processing fees from **~$93.0 billion** in annual out-of-pocket patient spending, and a portion of the **$6.0 billion** spent by life sciences on direct-to-consumer marketing[36](index=36&type=chunk) [Our Value Proposition and Growth Strategies](index=8&type=section&id=Item%201.%20Business%23Our%20Value%20Proposition%20and%20Growth%20Strategies) Phreesia delivers value to patients, healthcare clients, and life sciences firms, pursuing growth through client expansion, upselling, innovation, and strategic acquisitions - Value Proposition for Healthcare Clients: Aims to improve cash flow, profitability, and clinical outcomes while simplifying operations and enhancing patient experience[40](index=40&type=chunk) - Value Proposition for Life Sciences: Provides a targeted digital channel to activate patients, improve brand conversion, and gather patient feedback[41](index=41&type=chunk) - Growth is pursued through **five key strategies**: expanding to new healthcare organizations, deepening existing client relationships, innovating the platform, opportunistic acquisitions, and enhancing margins via strategic growth[46](index=46&type=chunk) - Recent acquisitions include Insignia Health (December 2021) for its Patient Activation Measure (PAM®), QueueDr (January 2021) for appointment scheduling, and others to expand clinical and patient activation offerings[50](index=50&type=chunk) [Our Products, Services, and Technology](index=11&type=section&id=Item%201.%20Business%23Our%20Products%2C%20Services%2C%20and%20Technology) Phreesia's product suite spans Access, Registration, Revenue Cycle, Clinical Support, and Life Sciences, powered by a scalable, secure SaaS platform integrated with healthcare systems - Product offerings are divided into **five main categories**: Access, Registration, Revenue Cycle, Clinical Support, and Life Sciences[52](index=52&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) - The platform supports COVID-19 workflows, including vaccine management, risk screening, and contactless check-in for in-person and telehealth visits[61](index=61&type=chunk) - The technology platform is a single, unified, multi-tenant system with robust integration capabilities for PM and EHR systems, operating across four co-located data centers and Microsoft Azure and Amazon Web Service environments[61](index=61&type=chunk)[64](index=64&type=chunk) [Sales, Marketing, and Support](index=15&type=section&id=Item%201.%20Business%23Sales%2C%20Marketing%2C%20and%20Support) Phreesia employs a direct sales model with a 3-6 month cycle, supported by dedicated client service teams for onboarding, retention, and technical support - A direct sales organization is used to sell products and services to healthcare services clients and pharmaceutical brands throughout the U.S[66](index=66&type=chunk)[67](index=67&type=chunk) - The average sales cycle varies from **three to six months**, depending on the potential client's size[66](index=66&type=chunk) - Client support is structured around dedicated teams for Client Services (onboarding/implementation), Client Success (retention/expansion), and Client Support (technical issues)[68](index=68&type=chunk)[74](index=74&type=chunk) [Regulatory Matters and Human Capital](index=16&type=section&id=Item%201.%20Business%23Regulatory%20Matters%20and%20Human%20Capital) Phreesia operates under strict healthcare regulations like HIPAA and CCPA, employing 1,701 full-time remote staff as of January 2022, with a focus on diversity and inclusion - Phreesia is subject to extensive healthcare regulations, including HIPAA, where it is classified as a 'business associate', making it directly liable for certain compliance requirements and breach notifications[71](index=71&type=chunk)[72](index=72&type=chunk) - The company must also comply with state privacy laws like the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), as well as federal laws like the Telephone Consumer Protection Act (TCPA)[76](index=76&type=chunk)[84](index=84&type=chunk) - As of January 31, 2022, the company had **1,701 full-time employees** (1,146 in the U.S. and 555 internationally) and has operated as a fully remote company since 2020[97](index=97&type=chunk)[101](index=101&type=chunk) - The company is committed to diversity and inclusion, supported by employee resource groups (ERGs), and was added to the Bloomberg Gender Equality Index in January 2022[99](index=99&type=chunk)[100](index=100&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) Phreesia faces significant risks including rapid growth management, intense competition, net losses, data security, IP infringement, evolving regulations, third-party reliance, and financial constraints - Business and Industry Risks: Challenges in managing rapid growth, intense competition from niche and large companies including EHR/PM systems, a history of net losses, and the impact of economic disruptions[107](index=107&type=chunk)[110](index=110&type=chunk)[118](index=118&type=chunk) - Data, IP, and Regulatory Risks: Vulnerability to security breaches and privacy concerns, potential IP infringement lawsuits, and navigating a complex web of regulations like HIPAA, CCPA, GDPR, and anti-kickback statutes[127](index=127&type=chunk)[172](index=172&type=chunk)[191](index=191&type=chunk) - Dependence and Financial Risks: Reliance on third-party vendors and payment processors, potential need for additional capital, restrictive debt covenants, and limitations on the use of net operating loss (NOL) carryforwards[224](index=224&type=chunk)[242](index=242&type=chunk)[244](index=244&type=chunk) - A **material weakness** in internal control over financial reporting was previously identified related to segregation of duties and review of manual journal entries, which has since been remediated[133](index=133&type=chunk) [Item 1B. Unresolved Staff Comments](index=49&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[256](index=256&type=chunk) [Item 2. Properties](index=50&type=section&id=Item%202.%20Properties) Phreesia leases its corporate headquarters in Raleigh, NC (16,120 sq ft) and an office in Kanata, Ontario (4,322 sq ft), with both leases expiring in 2023 - The company leases its corporate headquarters in Raleigh, NC (**16,120 sq ft**) and an office in Kanata, Ontario (**4,322 sq ft**)[257](index=257&type=chunk) - Both primary office leases expire in **2023**[257](index=257&type=chunk) [Item 3. Legal Proceedings](index=50&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings that would adversely affect its business or financial condition - Phreesia is not presently a party to any material legal proceedings[258](index=258&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[259](index=259&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Phreesia's common stock (PHR) trades on the NYSE, with no history or current intent to pay cash dividends, restricted by its credit facility - Common stock (**PHR**) has been trading on the NYSE since **July 18, 2019**[261](index=261&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future[267](index=267&type=chunk) - As of **March 25, 2022**, there were approximately **49 stockholders of record**[266](index=266&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Phreesia's fiscal 2022 revenue grew 43% to $213.2 million, but net loss widened to $118.2 million due to significant growth investments, despite strong liquidity from a follow-on equity offering [Financial Highlights and Recent Developments](index=53&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Financial%20Highlights%20and%20Recent%20Developments) Fiscal 2022 saw Phreesia's revenue grow 43% to $213.2 million, but net loss increased to $118.2 million, alongside strategic acquisitions and an expanded credit facility Financial Highlights | Metric | Fiscal 2022 | Fiscal 2021 | | :--- | :--- | :--- | | Total Revenue (in millions $) | $213.2 | $148.7 | | Net Loss (in millions $) | ($118.2) | ($27.3) | | Adjusted EBITDA (in millions $) | ($59.0) | $3.8 | | Cash used in operating activities (in millions $) | ($74.7) | $2.9 (provided) | - Acquired Insignia Health, LLC for **$37.2 million** in cash in December 2021 to gain its exclusive worldwide license to the Patient Activation Measure (PAM®)[286](index=286&type=chunk) - Acquired QueueDr Inc in January 2021 to enhance appointment solutions for a total consideration including **$5.8 million** in cash[287](index=287&type=chunk)[288](index=288&type=chunk) - In March 2022, increased the borrowing capacity of its Silicon Valley Bank credit facility from **$50.0 million** to **$100.0 million**[289](index=289&type=chunk) [Key Metrics](index=55&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Key%20Metrics) Phreesia's fiscal 2022 key metrics show client growth (21% to 2,074), increased average revenue per client (11% to $77,478), and a 39% rise in patient payment volume to $2.8 billion Key Operational Metrics | Key Metric | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | Healthcare services clients (average) | 2,074 | 1,711 | 21% | | Average revenue per healthcare services client ($) | $77,478 | $69,499 | 11% | Additional Information | Additional Information | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | Patient payment volume (in millions $) | $2,769 | $1,997 | 39% | | Payment facilitator volume percentage | 79% | 81% | (2)% | [Results of Operations](index=57&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) Fiscal 2022 total revenue grew 43% to $213.2 million, but operating expenses surged 89% to $330.1 million, resulting in a widened operating loss of $116.8 million and a net loss of $118.2 million Revenue Stream | Revenue Stream (in thousands $) | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | Subscription and related services | $95,514 | $69,042 | 38% | | Payment processing fees | $65,201 | $49,900 | 31% | | Life sciences | $52,518 | $29,735 | 77% | | **Total revenue** | **$213,233** | **$148,677** | **43%** | Expense Category | Expense Category (in thousands $) | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | Cost of revenue (excl. D&A) | $42,669 | $23,461 | 82% | | Payment processing expense | $38,719 | $28,925 | 34% | | Sales and marketing | $106,421 | $42,972 | 148% | | Research and development | $52,265 | $22,622 | 131% | | General and administrative | $68,674 | $40,460 | 70% | | **Operating loss** | **($116,817)** | **($25,671)** | **355%** | - The increase in operating expenses was primarily driven by higher employee compensation costs due to increased headcount and higher pay, as well as increased third-party marketing, advertising, and software costs to support growth[307](index=307&type=chunk)[311](index=311&type=chunk)[313](index=313&type=chunk)[315](index=315&type=chunk) [Non-GAAP Financial Measures](index=61&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Non-GAAP%20Financial%20Measures) Phreesia's fiscal 2022 Adjusted EBITDA was a loss of $59.0 million, and free cash flow was negative $105.5 million, reflecting increased net loss and higher capital expenditures Reconciliation to Adjusted EBITDA | Reconciliation to Adjusted EBITDA (in thousands $) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net loss | ($118,161) | ($27,292) | | Interest expense (income), net | 1,084 | 1,573 | | Provision for income taxes | 182 | 49 | | Depreciation and amortization | 21,302 | 15,908 | | Stock-based compensation expense | 36,234 | 13,489 | | **Adjusted EBITDA** | **($59,023)** | **$3,797** | Reconciliation to Free Cash Flow | Reconciliation to Free Cash Flow (in thousands $) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($74,710) | $2,890 | | Less: Capitalized internal-use software | (12,385) | (7,334) | | Less: Purchases of property and equipment | (18,420) | (11,241) | | **Free cash flow** | **($105,515)** | **($15,685)** | [Liquidity and Capital Resources](index=63&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Liquidity%20and%20Capital%20Resources) Phreesia's cash and equivalents rose to $313.8 million by January 2022, primarily from a $245.8 million equity offering, despite $74.7 million cash used in operations, with sufficient liquidity for the next 12 months - Cash and cash equivalents increased to **$313.8 million** as of Jan 31, 2022, from **$218.8 million** a year prior[329](index=329&type=chunk) - Completed a follow-on offering in April 2021, raising net proceeds of **$245.8 million**[329](index=329&type=chunk)[341](index=341&type=chunk) - Net cash used in operating activities was **$74.7 million** in fiscal 2022, compared to **$2.9 million** provided by operating activities in fiscal 2021, driven by higher employee compensation and other operating costs[335](index=335&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) - As of Jan 31, 2022, there were no outstanding borrowings under the revolving line of credit with SVB. In March 2022, the borrowing capacity was increased from **$50.0 million** to **$100.0 million**[331](index=331&type=chunk)[332](index=332&type=chunk) [Critical Accounting Policies and Estimates](index=65&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Critical%20Accounting%20Policies%20and%20Estimates) Phreesia's critical accounting policies involve significant estimates in revenue recognition, business combinations, capitalized software, income taxes, and stock-based compensation, particularly regarding performance obligations and asset valuations - Revenue Recognition: Critical judgments include identifying performance obligations, determining standalone selling prices (SSP), estimating variable consideration, and assessing principal versus agent status for payment processing fees, which are recognized on a gross basis[348](index=348&type=chunk)[359](index=359&type=chunk) - Business Combinations: Fair value of acquired assets and liabilities is determined using estimates and third-party appraisers, with methods like relief-from-royalty for licenses and multi-period excess earnings for customer relationships[361](index=361&type=chunk) - Capitalized Internal-Use Software: Costs for developing the Phreesia Platform are capitalized during the development phase and amortized over an estimated useful life of **three to five years**[363](index=363&type=chunk) - Income Taxes: The company has significant net operating loss (NOL) carryforwards of **$332.5 million** as of Jan 31, 2022. A valuation allowance of **$97.3 million** is recorded against deferred tax assets due to uncertainty of their realization[366](index=366&type=chunk)[368](index=368&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=69&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Phreesia's market risks are primarily interest rate (minimal) and foreign currency (Canadian dollar expenses), with no material impact on financial statements to date - Primary market risks are interest rate and foreign currency exchange risk[375](index=375&type=chunk) - Interest rate risk is low due to cash and cash equivalents being held in short-maturity accounts[376](index=376&type=chunk) - Foreign currency risk relates to expenses in Canadian dollars. The company has used forward contracts to mitigate this risk, but none were outstanding at year-end[377](index=377&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=70&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Phreesia's audited consolidated financial statements for fiscal 2022, with KPMG's unqualified opinion and critical audit matters regarding performance obligations and intangible asset valuation [Report of Independent Registered Public Accounting Firm](index=71&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued an unqualified opinion on Phreesia's financial statements and internal controls, highlighting critical audit matters concerning performance obligations and Insignia acquisition intangible asset valuation - KPMG LLP issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting[383](index=383&type=chunk)[400](index=400&type=chunk) - A **critical audit matter** was the identification of performance obligations for larger enterprise healthcare services contracts due to the varying nature of promises and contract terms[389](index=389&type=chunk)[391](index=391&type=chunk) - A second **critical audit matter** was the evaluation of the acquisition-date fair value of intangible assets from the Insignia acquisition, specifically the PAM License and customer relationships, due to the high degree of subjectivity in assumptions like forecasted revenue, EBITDA margins, and discount rates[394](index=394&type=chunk)[395](index=395&type=chunk) [Consolidated Financial Statements](index=76&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Consolidated%20Financial%20Statements) Phreesia's fiscal 2022 consolidated financial statements show total assets of $494.5 million, a net loss of $118.2 million, and a $95.0 million net increase in cash Consolidated Balance Sheet | Balance Sheet (in thousands $) | Jan 31, 2022 | Jan 31, 2021 | | :--- | :--- | :--- | | Total Assets | $494,476 | $326,666 | | Total Liabilities | $77,196 | $63,360 | | Total Stockholders' Equity | $417,280 | $263,306 | Consolidated Statement of Operations | Statement of Operations (in thousands $) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Total Revenue | $213,233 | $148,677 | | Operating Loss | ($116,817) | ($25,671) | | Net Loss | ($118,161) | ($27,292) | | Net Loss Per Share | ($2.37) | ($0.69) | Consolidated Statement of Cash Flows | Statement of Cash Flows (in thousands $) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Cash (used in) provided by Operating Activities | ($74,710) | $2,890 | | Cash used in Investing Activities | ($65,228) | ($25,085) | | Cash provided by Financing Activities | $234,969 | $150,661 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=112&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles or financial disclosure - None[596](index=596&type=chunk) [Item 9A. Controls and Procedures](index=112&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of January 31, 2022, following remediation of a prior material weakness - Management concluded that disclosure controls and procedures were effective as of **January 31, 2022**[596](index=596&type=chunk) - A **material weakness** in internal control over financial reporting identified as of January 31, 2021, related to user access and program change controls, was remediated during fiscal year 2022[602](index=602&type=chunk)[603](index=603&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of **January 31, 2022**[600](index=600&type=chunk)[604](index=604&type=chunk) Part III [Items 10, 11, 12, 13, and 14](index=115&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for Items 10-14, covering governance, compensation, and related party disclosures, is incorporated by reference from the forthcoming 2022 proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the forthcoming 2022 proxy statement[609](index=609&type=chunk)[610](index=610&type=chunk)[611](index=611&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=116&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including financial statements, corporate governance documents, material contracts, and required certifications - This section lists all exhibits filed with the Annual Report on Form 10-K[616](index=616&type=chunk) - Filed exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, employment agreements with key executives, the credit agreement with Silicon Valley Bank, and various required certifications[617](index=617&type=chunk)[618](index=618&type=chunk) [Item 16. Form 10-K Summary](index=118&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company's filing - Not applicable[620](index=620&type=chunk)

Investor Presentation January 2022 DISCLAIMERS AND FORWARD-LOOKING STATEMENTS This presentation includes express or implied statements that are not historical facts and are considered forward- looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projectio ...

Phreesia, Inc. (NYSE:PHR) Q3 2022 Earnings Conference Call December 9, 2021 8:45 AM ET Company Participants Balaji Gandhi - SVP, IR Chaim Indig - CEO and Co-Founder Randy Rasmussen - CFO Conference Call Participants John Ransom - Raymond James Anne Samuel - JPMorgan Richard Close - Canaccord Genuity Glen Santangelo - Jefferies Ryan MacDonald - Needham Donald Hooker - KeyBanc Scott Schoenhaus - Stephens Daniel Grosslight - Citi Operator Good morning, ladies and gentlemen, and welcome to the Phreesia Fiscal T ...